Well, shows how much I know about the stock markets. I was sure the UK markets would leap into the air on Monday 12th on the first day of non-essential shops opening in England. But no – it stayed pretty flat but did creep up as the week went on. I then thought the UK markets would rise significantly on Monday 19th after the first weekend of the shops being open. But no – it actually dipped. I know nuffinks. But I’m in, and in it for the long term, and that’s what’s important.
Generally the markets went up rather agreeably during April helping me to achieve a couple of milestones.
- £40,858.90 @ 1st May – S&S ISA
- £112,100.34 @ 1st May – Pension 1, my current work pension
- £106,249.00 @ 1st July 2020 – Pension 2, a deferred pension from long, long ago. I only get an updated figure once a year, unless I request a transfer value
- £259.208.24 @ 1st May – is my Future Fund
- +2.94% since 1st April
A couple of posts ago I grumbled rather ungratefully that my Pension Number One had finally stepped over the £100k mark and had stayed there in time for my monthly post. Remarkably, it’s now ticked over £110k. But what I’m rather more excited about is my baby, my S&S ISA, has toddled over the £40k mark. This is a bit more special to me as I’ve nurtured this pot for 20 years with my own bare, calloused hands.
I dipped a nervous toe into the big bad stock market in 2001 (OMG that’s 20 years ago!) when I ‘threw away’ a grand of a voluntary redundancy payout. It felt very reckless at the time and I can’t quite remember why I even chose to do it. I got £7k when I left a warehouse job and I suppose I felt a bit flush and that I could risk losing a grand. 10 years later it had got to just over £3k, without any further contributions, and I was less than impressed. I hadn’t lost it though and at the time I didn’t appreciate that no cash savings account would’ve been able to have achieved that return which equates to an annualised interest rate of nearly 12 per cent.
For the next four years I continued to do nothing with this S&S ISA. But I did something in 2015 that I’ve now only got a vague memory of. I decided to start another fund, within the same ISA, but with a different provider. I didn’t realise that, as it was an ISA, I could only have it with one provider. I was surprised when I received a letter from the previous provider saying they were sorry to see me go. I didn’t know this going to happen and was rather disappointed. The fund I had with them was automatically transferred to the new provider and that was that. I’m working on a post about my S&S ISA and will go into detail in that. Keep your popcorn unpopped – but at hand.
My additional spending in April was...
- £38.50 – birthday gift
- £10 – Easter gifts
- £1.70 – postage
- £100 – money gift
- £3.99 – eBook
- £2.00 – snacks! For me! Uh oh... The spending has started...
- £8.99 – pair o’ slippers
- £54.13 – train tickets for walking holiday
- £10 – car (@#!&%!)
- £36 – camping gear
- £216.81 – total
- £410 – joint account
- £500 – S&S ISA
- £5.00 – charity
- £7.45 – mobile phone
- £49.94 – Software subscription
- £29.55 – yearly fixed expenses
- £204.64 (approx) – car insurance
- £150 – car tax
- £1,001.94 total
So excluding my investments and yearly fixed expenses my total monthly expenditure was:
My FF at its current value, using the four per cent SWR, would provide me with £864.03 a month so would’ve covered last month’s spending with room to spare.
I’ve been reading some rather sobering posts recently about the four per cent safe withdrawal rate. It seems to be not so wonderful. There’s so much conflicting advice among the FIRE community. I read one post and I feel all optimistic – I read another and I get chills. Does the steel breeze of hard reality cut through the fairy tale of FIRE? As I’m aiming for skinny FIRE, I’m going to have continue to monitor the varying thoughts, insights and opinions of my fellow FIREonauts very regularly.
I’m generally feeling optimistic though that I could have closer to £400k around the time of my proposed FIRE date. So I may be able to opt for a three and half per cent SWR. It also makes sense to be flexible with one’s withdrawal rate. If the markets take a sharp dive, as surely they will, I can reduce the WR to maintain the capital. This may mean an unknown period of being fantastically frugal.
Anyway, enough bleakness.
- £1,095.30 – into my current work pension
- £500 – into my S&S ISA
- £1,595.30 – total monthly savings. A saving rate of 71.6%
My two days a week commute starts at the end of June so I’ll be waving adios to that amazing saving rate. I’ll probably have to drop it back down to 60 per cent-ish but will try to cling on to 70-odd per cent for as long as possible. I would like to maintain the £500 going into my S&S ISA but it makes sense to keep ploughing the dosh into my Pension Number One due to the tax relief it gets going in, and the now very noticeable compounding effect it’s developing. It took 17 years for it to get to £100k, but that is with low contributions for most of that time – five per cent a month. I’ve been contributing 40 per cent since July last year. If it can keep up around a £10k increase every two months, then... Well, sweet dreams.
Until then, bring on May 17th!* The markets are sure to leap into the air and the FTSE 100 will finally get back up to where it was before the Covid crash. But what do I know?
*The date when people can eat and drink in the frikken warmth in Merrie Cold England.